| Refinancing lures, isn't easy
Another mortgage-refinancing boom is under way. But this time around, many homeowners will be watching from the sidelines. For the first time since 2005, mortgage rates have slipped well below 6 percent. As rates drop further - and some expect that to happen if the economy continues to weaken - increasing numbers of consumers will find refinancing their existing mortgage worthwhile. But here's the catch, and it's a big one: Many homeowners won't benefit, either because their mortgage is too big or their credit score is too low. In other cases, falling home prices will make it tough for them to refinance. .
Ray Unger: Don't be too surprised by the next sneak attack
Is betting the ranch on a whimsical spin of the roulette wheel using good judgment? Or how about borrowing three, four, may five times your investment, and betting the whole bundle on which way volatile instruments like derivatives, futures, currencies, options or commodities will squiggle? Now some investors will say, "Yes, I understood what they were buying and selling, but the technical strategies they used actually reduced their risk." What these managers, and investors forgot is the unassailable law of random events. In non-statistical terms, that means something can come out of the blue and blow up the best laid technical strategy. For example, do you know what happened to those smart currency hedgers who borrowed Japanese yen at low interest rates (roughly 1 percent), converted the yen into U.S.
Fed's plan makes sense, but won't resolve current woes
Federal Reserve Chairman Ben Bernanke and his fellow board members on Tuesday proposed regulatory changes that would curtail shady lending practices and protect consumers from falling victim to bad loan deals. The proposed rules make a lot of sense. For instance, lenders would be required to verify applicants' income and assets before making a loan, and would be prohibited from coercing a real estate appraiser to misstate a home's value. Most people assume that lenders already are required to verify applicants' income and not allowed to meddle with establishing an appraisal. The fact they are not is disturbing - and helps explain why the current mortgage crisis is driving people out of their homes and threatening the nation's economy. .
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